Morningstar DBRS Assigns Provisional Credit Ratings to Eagle Credit Card Trust, Series 2025-1

DBRS Limited (Morningstar DBRS) assigned provisional credit ratings to the Credit Card Receivables-Backed Notes, Series 2025-1 to be issued by Eagle Credit Card Trust (the Trust) as follows:

-- (P) AAA (sf) to the Credit Card Receivables-Backed Class A Notes, Series 2025-1 (the Class A Notes)
-- (P) A (sf) to the Credit Card Receivables-Backed Class B Notes, Series 2025-1 (the Class B Notes)
-- (P) BBB (sf) to the Credit Card Receivables-Backed Class C Notes, Series 2025-1 (the Class C Notes; collectively with the Class A Notes and Class B Notes, the Notes)

The finalization of the credit ratings is contingent upon receipt of final documents conforming to information already received by Morningstar DBRS.

Morningstar DBRS considered the following factors in its analysis:

(1) For the Class A Notes, credit enhancement will be available through subordination of 7.0%, providing preferential access to cash flows relative to the Class B Notes and Class C Notes, excess spread, and the Reserve Account, which could build up to 5% of the Invested Amount.

(2) For the Class B Notes, credit enhancement will be available through subordination of 3.5%, providing preferential access to cash flows relative to the Class C Notes, excess spread, and the Reserve Account.

(3) For the Class C Notes, credit enhancement will be available through excess spread and the Reserve Account.

(4) Payment rates and gross yield are strong and among the highest in Canada. Over the past three years, three-month average payment rates have averaged 67%, while three-month average gross yield has averaged 26%. However, a weakening labour market and affordability concerns from the higher cost of living and borrowing costs have put pressure on consumers and net loss rates have increased over the past two years with the three-month average net loss rate standing at 3.8% as of February 28, 2025.

(5) The receivables pool is diversified and well-seasoned, with approximately 88.2% of the receivables arising from accounts that are at least 48 months old as of February 28, 2025.

Morningstar DBRS stress testing indicates that simultaneous declines in yield and payment rates and increases in losses would not result in a failure of the Trust in repaying the Notes on a timely basis. The severity of the tests applied is commensurate with the respective ratings of the Notes.

Morningstar DBRS notes that the transaction documents do not require the remittance of collections into a Trust account within two business days when the Performance Guarantor is no longer rated investment grade, as expected in Morningstar DBRS "Legal and Derivatives Criteria for Canadian Structured Finance" methodology. Should the Performance Guarantor be downgraded below investment grade, Morningstar DBRS will assess the impact of partial commingling at the time and take appropriate rating action.

Morningstar DBRS' credit rating on the Notes addresses the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. The associated financial obligations are the related principal and interest amounts.

Morningstar DBRS' credit rating does not address nonpayment risk associated with contractual payment obligations contemplated in the applicable transaction document(s) that are not financial obligations.

Morningstar DBRS' long-term credit ratings provide opinions on risk of default. Morningstar DBRS considers risk of default to be the risk that an issuer will fail to satisfy the financial obligations in accordance with the terms under which a long-term obligation has been issued. The Morningstar DBRS short-term debt rating scale provides an opinion on the risk that an issuer will not meet its short-term financial obligations in a timely manner.

ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS
There were no Environmental/Social/Governance factors that had a significant or relevant effect on the credit analysis.

A description of how Morningstar DBRS considers ESG factors within the Morningstar DBRS analytical framework can be found in the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Factors in Credit Ratings at https://dbrs.morningstar.com/research/437781 (August 13, 2024).

Notes:
All figures are in Canadian dollars unless otherwise noted.

The principal methodology applicable to the credit ratings is Rating Canadian Credit Card and Personal Line of Credit Securitizations (October 24, 2024; https://dbrs.morningstar.com/research/441733).

Other methodologies referenced in this transaction are listed at the end of this press release.

The Morningstar DBRS Sovereign group releases baseline macroeconomic scenarios for rated sovereigns. Morningstar DBRS analysis considered impacts consistent with the baseline scenarios as set forth in the following report: https://dbrs.morningstar.com/research/416703.

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link under Related Documents or by contacting us at info-dbrs@morningstar.com.

The credit rating was initiated at the request of the rated entity.

The rated entity or its related entities did participate in the credit rating process for this credit rating action.

Morningstar DBRS had access to the accounts, management, and other relevant internal documents of the rated entity or its related entities in connection with this credit rating action.

This is a solicited credit rating

For more information on Morningstar DBRS' policy regarding the solicitation status of credit ratings, please refer to the Credit Ratings Global Policy, which can be found in the Morningstar DBRS Understanding Ratings section of the website (https://dbrs.morningstar.com/understanding-ratings).

A provisional credit rating is not a final credit rating with respect to the above-mentioned securities and may change or be different than the final credit rating assigned or may be discontinued. The assignment of final credit ratings on the above-mentioned securities is subject to receipt by Morningstar DBRS of all data and/or information and final documentation that Morningstar DBRS deems necessary to finalize the credit ratings.

Please see the related appendix for additional information regarding the sensitivity of assumptions used in the credit rating process.

The full report providing additional analytical detail is available by clicking on the link under Related Documents below or by contacting us at info-dbrs@morningstar.com.

DBRS Limited
DBRS Tower, 181 University Avenue, Suite 700
Toronto, ON M5H 3M7 Canada
Tel. +1 416 593-5577

The credit rating methodologies used in the analysis of this transaction can be found at: https://dbrs.morningstar.com/about/methodologies.

Operational Risk Assessments for Canadian Structured Finance (March 28, 2025; https://dbrs.morningstar.com/research/450831)

Legal and Derivatives Criteria for Canadian Structured Finance (August 12, 2024; https://dbrs.morningstar.com/research/437761)

A description of how Morningstar DBRS analyzes structured finance transactions and how the methodologies are collectively applied can be found at: https://dbrs.morningstar.com/research/410863.

For more information on this credit or on this industry, visit dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.